CCA 200906047: Different consent forms extended partnership-related assessment periods

Plain-English summary

Chief Counsel explained how Forms 872-I and 872-P affect limitations periods in a TEFRA partnership audit. Because a partnership pays no income tax, extending its own income-tax period on Form 872-I generally serves no purpose, but added language can extend the period for a section 6707A penalty against the partnership. Form 872-P instead lets the tax matters partner, acting for the partners, extend each partner's section 6501 period for partnership and affected items. That form should generally be secured when partnership adjustments could produce additional tax for partners, but it probably does not extend the section 6707A penalty period. An individual partner can use Form 872-I to extend the period for partnership items and include specific section 6707A language when that penalty is also at issue.

Ruling snapshot

• Question: Which consent forms extend assessment periods for partnership items and section 6707A penalties?
• Outcome: Advice given: Form 872-P extends partners' periods for partnership matters, while a Form 872-I needs specific section 6707A language to cover that penalty.
• Key authorities: IRC §§ 6229, 6501, 6707A.

Full text (IRS public release)

ID: CCA-951138-08 Number: 200906047
Release Date: 2/6/2009
Office: -------------
UILC: 6229.02-00

From: --------------------
Sent: Fri 9/5/2008 11:38 AM
To: ----------------------
Cc: ---------------------------------------------------------------------------------------------------------------------------
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Subject: RE: 872-I and TEFRA partnerships ---------

A partnership pays no income tax so generally there is no point in having a partnership extend its own statute using a Form 872-i. But it can use that form to extend the 6707A penalty against it by including the 6707A language.

A Form 872-P is not an extension by the partnership. It is an extension of each partner's section 6501 period for partnership items and affected items by the partners' agent, the TMP. If there are adjustments to partnership items that will result in additional income tax against the partners, we should generally secure such an extension as part of a TEFRA audit. This probably does not extend the period for the 6707A penalty.

Instead of the TMP extending the section 6501 statute for all partners, as their agent using a Form 872-P, each individual partner can extend their own statute for partnership items using a Form 872-i. If we have a separate 6707A penalty issue against the partner, language referencing 6707A can be included in such extensions.